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Exam CSCP topic 1 question 298 discussion

Actual exam question from APICS's CSCP
Question #: 298
Topic #: 1
[All CSCP Questions]

A firm has determined its cash-to-cash cycle time to be 60 days. The number of days' payables outstanding is 25, and number of days' sales outstanding is 35. If the firm reduces its inventory by 20%, the new cash-to-cash cycle time, in days, will be approximately:

  • A. 48.
  • B. 50.
  • C. 60.
  • D. 88.
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Suggested Answer: B 🗳️
by Hao2 at Oct. 13, 2019, 1:48 a.m.

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Hao2
Highly Voted 4 years, 2 months ago
Initial Inventory = 60+25-35=50 After reduced 20%, Inventory= 40 New Cash to Cash= 35+40-25= 50
upvoted 12 times
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eliemme
Most Recent 4 weeks, 1 day ago
Selected Answer: C
Imo, it's C Cash to cash calculation formula doesnt include inventory, so even if inventory level changes the cash to cash time remains 60 days
upvoted 1 times
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rehan747
2 months ago
CC = DIO+DSO-DPO 60 = DIO+35-25 DIO = 60-35+25 = 50 Inventory reduced by 20% , new DIO will be 50- 20%of 50 = 40 CC= new DIO+35(DSO)-25(DPO) =40+35-25 =50
upvoted 2 times
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